Thanks Jeremy.
It has been a frustrating few days to say the least. I downloaded all the patches, reviewed what software I was loading that would consume resources, cleaned up my registry, yada yada yada… but nothing worked.
I decided to take a step back and try the same process with pictures off of my digital camera and low & behold it worked just fine. However, when I went back to the scanned slides it would hang up again?!?!? So then I tried it with scanned photos and it worked fine again. After playing with multiple combinations of still images & music I have concluded that it has something to do with the way I scanned in the slides.
I am going to re-scan everything back in and pay close attention to my setting for these images; it has to be something with this.